Stocks closed slightly lower, falling when protests in Athens briefly turned violent on Wednesday, as Greek lawmakers prepare to vote on a fresh bailout deal from creditors.
First, the scoreboard:
- Dow: 18,021.31, -32.27, (-0.18%)
- S&P 500: 2,106.61, -2.34, (-0.11%)
- Nasdaq: 5,096.95, -7.94, (-0.16%)
And now, the top stories on Wednesday:
- Protests briefly turned violent in Athens’ central square ahead of a vote in parliament on a new bailout deal. The latest package comes with strings attached, including some conditions stricter than those that Greeks voted against in the recent referendum. A small group of anti-austerity protesters threw petrol bombs near riot police, according to Reuters. The parliamentary debate starts at 10 p.m. Athens time (3 p.m. ET.) with voting expected later tonight.
- Federal Reserve chair Janet Yellen gave her biannual update on monetary policy to the Financial Services Committee of the House of Representatives. In prepared remarks, she reiterated that the Federal Reserve is glued to the economic data, and would raise rates this year if the conditions are appropriate. She said it’s not clear whether bond market liquidity, or the lack thereof, is a problem. Yellen will testify before the Senate Banking Committee tomorrow.
- The Federal Reserve’s published its latest beige book with anecdotes from the economies in its 12 districts. The report showed only “modest wage pressures” in the US economy. Consumer spending was mixed, and tourism was strong in all reporting regions except New York. The beige book noted that it’s quite ugly on Broadway.
- The Canadian dollar crashed to an 11-year low against the US dollar after the Bank of Canada lowered its Overnight Rate to 0.50% from 0.75%. The currency, nicknamed the loonie, fell to as low as 1.2723 to the dollar. The central bank also lowered its outlook for Canada. It said, “while vulnerabilities associated with household imbalances remain elevated and could edge higher, Canada’s economy is undergoing a significant and complex adjustment. Additional monetary stimulus is required at this time to help return the economy to full capacity and inflation sustainably to target.”
- In economic data, the producer price index for final demand rose 0.4% in June, higher than the consensus forecast for 0.2%. A rebound in oil prices pushed up the gasoline index, which rose 4.3%.
- Empire State manufacturing activity rebounded in July, coming in at 3.9 versus -2 in June, and 3.2 expected. “Given that we do not see much meaningful improvement in the details of this morning’s release relative to June, we look to tomorrow’s Philly Fed manufacturing index for a better read on regional manufacturing activity at the start of Q3,” Barclays economists wrote in a client note.
- Industrial production beat forecasts in June, rising 0.3%. Capacity utilization came in at 78.4%, also beating expectations. Capital Economics’ Steve Murphy wrote in a note to clients: “Overall, industrial production was encouraging, and suggests that mining, which had been extremely weak so far this year may be turning the corner.
- US crude oil inventories fell after a two-week build, according to the Energy Information Administration. Stockpiles decreased by 4.3 million barrels in the week ending July 10, bringing the total number of barrels to 461.4 million — still the highest for this time of year in 80 years.
- Bank of America reported nearly double profits, with earnings per share of $US0.45 on revenue of $US22.35 billion in the second quarter. “We also benefited from the improvement in the U.S. economy, where we are particularly well positioned,” CEO Brian Moynihan said in the earnings release. The stock rallied as much as 3%.
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